With stocks at all time highs, Dennis Gartman, who took the time to make a quick mockery of cryptocurrencies in his latest letter, is starting to get nervous on risk assets, pointing out what he calls an “anomaly.” Below are the selected excerpts from his latest note:
THE S&P FUTURES: They Rise While Volume Falls!: We are still erring bullishly of the equity market, but we do find it passing strange that as the market has moved higher the volumes being transacted are plunging… and aren’t price and volume to move in concert, one with the other?.
STOCKS, GLOBALLY, CONTINUE THEIR RELENTLESS ADVANCE as six of the ten markets comprising our International Index have risen in the course of the past twenty four hours and as four have fallen… none by anything approaching 1% in either direction however. Further, if there is anything resembling a geographical trend it is that Asian shares have been a bit weaker than North American and European shares were stronger. On balance, however, there has been relatively little activity as the world awaits the final day of the two day FOMC meeting and as the world awaits the post-meeting statement by the Fed and the further post-meeting press conference by Dr. Yellen.
Two things have our attention this morning with the first being that the CNN Fear & Greed Index has risen by the barest of margins since yesterday, closing last evening at 81, up 1 point from that of the day previous. Secondly, we draw attention to the chart of the S&P futures [above]… the “lead” position in TGL as we have so often referred to it over the years and the place where we “float” potential new ideas or show charts defending old ideas… noting that as prices have risen to new highs the volume has waned and waned and waned again. This we find anomalous, for volume should always follow the trend and in this instance the trend is up while the volume is most assuredly down.
“Anomalies” tell stories. This is a lesson we have learned over the years and this anomaly it telling us that although the trend is up and although we are to remain bullish, we should be warily so; we should be modestly so; we should be fearfully so, but most of all we should not be aggressively so.
We have not reported our own positions in our retirement account of late and for a good reason: we’ve done nothing; that is, we are holding the same positions we were holding mid-week last week: we are long of gold in EUR and Yen denominated terms and we are long of a very small sum of corn via the corn ETF. We’ve done nothing and we see nothing more to be done…at least for the moment.
And, as a bonus, here is Gartman’s take on crypto:
“THE CRYPTO?UNIVERSE JUST KEEPS EXPANDING: Back in ’13, when the crypto market capitalization was $1.7 billion, Bitcoin was 93% of the total. As of now, with a market cap of $144 billion, Bitcoin is 47% of the total as Ethereum, Ripple, Dash, Ethereum “Classic,” Diet Dr. Pepper, Coke One and others compete for attention!”